Mexico, Venezuela Seek A United Front On Oil

January 27, 1986|By Vincent J. Schodolski, Chicago Tribune.

MEXICO CITY — The presidents of Mexico and Venezuela will meet this week to coordinate oil policies in an effort to halt the price decline that endangers the ability of both nations to meet massive debt payments this year.

Both countries are heavily indebted and owe much of the money to U.S. banks. Mexico owes $96.4 billion and Venezuela $22 billion, and officials in both countries have said the recent drop in petroleum prices may make it impossible for them to pay the interest due in 1986.

Mexico earns about 75 percent of its foreign-exchange reserves from oil exports; Venezuela earns about 90 percent from that source.

The Foreign Ministry announced that President Miguel de la Madrid and his Venezuelan counterpart, Jaime Lusinchi, will meet Thursday in the Mexican resort city of Cancun.

They will discuss the possibility of coordinating both production and pricing, the Foreign Ministry said. No further details were announced, but comments by Fransisco Labastida Ochoa, the minister of energy, mines and parastate industries, indicated Mexico is ready for an all-out price war.

``The price of petroleum is already falling, and if you want to sell in a crisis market, in disorder of falling prices . . . and obtain (satisfactory)

income, you have to make your prices competitive,`` he said during a hurried trip to Caracas last week.

The decline of oil prices to less than $20 per barrel has triggered chaos in world markets. Mexico had budgeted for a decline of $2 to $3 a barrel for all of 1986, and it already has said that these declines will force emergency spending cutbacks.